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• Frankenfoods: Europeans’ skepticism about genetically modified food is taking hold in the U.S.,
making targets of companies such as Monsanto.
• Politics: Public revulsion over the corporate bankrolling of politicians has energized campaign-
finance reform activists.
The ethics of such practices can be forthcoming.
• Sweatshops: Anti-sweatshop groups have sprung up on college campuses; they routinely picket
clothing manufacturers, toymakers, and retailers.
because of these practices.
3. What would you do in each of the scenarios described in Exhibit 5.4?
The minister wants a bribe. Bribery is illegal in the United States, and those found guilty of
bribery can go to prison. Refusing to pay a bribe and reporting
the request to your superior and the company’s legal counsel
would seem to be the safest approach.
Chapter 05 – Ethics, Corporate Responsibility, and Sustainability
4. Identify and discuss illegal, unethical, and socially responsible business actions in the news.
Students might be instructed to define the three terms, then review the business pages of a local or na-
5. Does your school have a code of ethics? If so, what does it say? Is it effective? Why or why not?
Most schools include in their catalog(s) a section on academic and related regulations that deal with
6. You have a job that you enjoy and you work 40 to 45 hours per week. How much off-the-job
volunteer work would you do? What kinds of volunteer work? How would you react if your
boss made it clear he or she wants you to cut back on the outside activities and devote more
hours to your job?
One can well argue that what you do off the job is totally independent of your regular employment.
Some people who work 40 to 45 per week at their job put in the same amount of time in volunteer ac-
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7. What are the arguments for and against the concept of corporate social responsibility? Where
do you stand, and why? Give your opinions, specifically, with respect to the text examples.
Those who argue in favor of corporate social responsibility see the corporation as a member of socie-
ty that enjoys the many benefits offered by that society. Relatively few organizations could function
without roads, schools, airports, etc. Corporations have a responsibility, therefore, to actively partici-
8. What do you think of the concept of a transcendent education, as described in the chapter?
What can be done to implement such a vision for education?
A transcendent education is a big undertaking, but one that will have as much of an impact on stu-
9. What is the current status of the Sarbanes-Oxley Act? Have there been any changes? What do
executives think of it now? What impact has it had?
All segments of the Sarbanes-Oxley Act are now implemented. It is, as noted in the text, still one of
the most influential pieces of legislation to ever hit corporations. Most executives are unhappy with
10. A company in England slaughters 70,000 baby ostrich chicks each year for their meat. It told a
teen magazine that it would stop if they receive enough complaints. Analyze this policy, practice
and public statement using the concepts discussed in the chapter.
In terms of analyzing this business decision, students may refer to the steps for ethical decision mak-
11. A Nike ad shows a picture of a girl, aged perhaps 8 or 9. The ad reads,
“If you let me play…
I will like myself more.
I will have more self-confidence.
I will suffer less depression.
3 “Sarbanes–Oxley: A price worth paying?” The Economist. London: May 21, 2005, Vol. 375, Iss. 8427;
pg. 82.
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I will be 60% less likely to get breast cancer.
I will be more likely to leave a man who beats me.
I will be less likely to get pregnant before I want to.
I will learn what it means to be strong.
If you let me play sports.”
Assess this ad in terms of chapter concepts surrounding ethics and social responsibility. What
questions would you ask in doing this analysis?
In analyzing this ad, a student should consider it in terms of corporate social responsiveness. The ap-
proaches to corporate social responsibility include: (1) reactive, (2) defensive, (3) accommodative,
12. Should companies be held accountable for actions of decades past, then legal, but since made
illegal as their harmful effects became known?
Yes, management should be held accountable for their actions and decisions they have made in the
past. There is a statute of limitations that must be recognized, however management of these compa-
13. Discuss courage as a requirement for ethical behavior. What personal examples can you offer,
either as an actor or as an observer? What examples are in the news?
Interestingly enough, Charles “Chuck” Prince, of Citigroup, is a good example of courage in the face
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EXERCISE 5.1 – MEASURING YOUR ETHICAL WORK BEHAVIOR
Objectives
1. To explore a range of ethically perplexing situations.
2. To understand your own ethical attitudes.
Suggested Responses
Situation 1 – Answer B is the most ethical approach for a student to take in this situation. A strong
ethics code will influence the outcome of making this type of decision.
Teaching Tips:
1. As the students complete each situation, ask for a show of hands in favor of each of the various
options.
EXERCISE 5.2 – ETHICAL STANCE
Purpose:
To allow participants to evaluate ethical situations and compare their judgments with others.
Time:
EXPERIENTIAL EXERCISES
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Activity Instructions:
Participants are to read the situations and make ethical judgments about how the situations should be han-
Teaching Tips:
This activity works well as a lead in to a discussion or lecture on ethics.
If done in a large group, you may want to have the participants rank these on a scale of 1-10, 1 being ethi-
Discussion/Debrief:
One take-away from this activity is that much like values, individuals possess different ethical perspec-
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MA Earth Skin Care Tries to Stay Natural
Case Summary:
Going to work for Ma Earth Skin Care was a “dream come true” for Heather Franklin. She was
proud to promote quality beauty products that were produced with a concern for the planet’s well–
being.
The next day, Heather asked her boss why the company pretended to care about a remote village, if it
was actually just a front to brand a product. Heather’s boss, Megan McDonough responded, “But we
do care! We send them tens of thousands of dollars every year.” She went on to explain that the
company would be glad to purchase all of the fruit from the village to produce the dye, if only the
tribe members were interested in growing and harvesting it. Megan stated, “Our aid has provided a
school and a health clinic, not to mention food and clothing. We’ve helped the tribe members stay
healthy and preserve their language and culture.”
Chapter Topics Related to the Case:
• Discuss the term ethics
• Discuss the term social responsibility
Case Discussion Questions:
1. What ethical issues is Heather facing in this situation? What possible marketing claims about the
company’s relationship with the Amazonian tribe would cross a line into unethical territory?
What claims could it make ethically?
CONCLUDING CASE
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Suggested Response:
As the case study clearly identifies, Heather is experiencing a strong sense of internal conflict over
2. How could Ma Earth create an ethical climate that would help managers such as Heather ensure
that they are behaving ethically?
Suggested Response:
Ma Earth could search for new natural sources to obtain their dyes. In addition, Ma Earth could es-
3. How effectively do you think Ma Earth is practicing corporate social responsibility in this situa-
tion? Explain the reason behind your evaluation.
Suggested Response:
The student responses will reflect personal viewpoints regarding the degree of corporate social re-
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Example 5.1 – Business ethics: INSEAD, an international business school, believes screening
for ethics reinforces their stance on ethical behavior. When making decisions as to who they will
Example 5.2 – Egoism: Egoism is shown in the actions taken by John Milne, the President and
Chief Financial officer of United Rentals. When he was approached by the Securities and Ex-
Example 5.3 – Ethics programs: Alyson Pitman Giles is President and CEO of CMC
Example 5.4 – Ethical decision-making: Worth Abbey, a Benedictine monastery in England, is
the focus of a hit TV series, and the setting for a new training program in business ethics based on
the rule of St. Benedict, a 5th century monk. Typical participants are senior managers charged by
Example 5.5 – Philanthropic responsibilities: Most students will be familiar with the company,
TOMS, whose well-known “one for one” mission is aimed at donating a pair of shoes to a child
in need for every pair of shoes purchased. TOMS sight initiative works in the same way, in that
4 Holstein, William J., “Screening for ethics: How one school does it.” The New York Times, Nov. 20, 2005, Section 3, Column 1, pg.
EXAMPLES
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are made to ensure that slavery and human trafficking laws are enforced. TOMS’ flagship store in
California is incorporating environmentally-friendly practices into the store and its operations.
Lastly, TOMS invests in employees and includes a number of company oversight experts to im-
prove sustainability.7
Example 5.6 – Environmental actions: If you work in an office environment, chances are good
that you’ve encountered one of Teknion’s products. This Toronto, Canada-based operation deliv-
ers office furniture systems globally. What’s different about Teknion is their commitment to the
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Please see the following additional materials in Connect.
• Cell Phones for Soldiers
Calling home can be very expensive for soldiers, or sometimes impossible if a base only has a
Why is it important for Rob and Brittany Bergquist to be socially responsible?
Rob and Brittany work on a completely volunteer basis and have no paid employees, but as
Ethics: Let’s Make a Fourth Quarter Deal
I. Introduction
This scenario provides a depiction of the ethical dilemmas that may arise when two legitimate or-
II. Learning Objectives
1. To analyze the causes of ethical dilemmas
III. Scenario Description:
SUPPLEMENTAL FEATURES
MANAGER’S HOT SEAT (MHS)
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Overview: A Wall Street trading company, Smith/Blackwell, is coming to the end of their 4th
Quarter. BesTel Inc. has offered to invest 4 million dollars with Smith/Blackwell which would
not only save the department from lay-offs but would create year-end bonuses for the manager’s
Profile:
• Jason Powell, Director of New Accounts, manages a team of 25 people. Held position
for 4 years but in the past two years, investments have fallen by over 50% department–
wide.
References: The references included in the DVD are:
• Concepts in Ethical Behavior (PPT 2-3)
Back History: As the economy worsens, the new accounts department is facing layoffs and
Scene Set-up: Travers makes an appointment with Powell to discuss some recent opportunities.
Scene Location: Powell’s office.
The Meeting – Summary: Gina, the account representative approaches Jason with a “deal” from
BesTel that will save the department and allow everyone to earn their bonuses for the year. Jason
is reluctant to jump on board with this plan because the transaction would not be approved by the
company’s shareholders in time for the 4th quarter.
Afterthoughts – Summary: Jason did not think the meeting went well. He was concerned with
Gina’s insistence on rushing to action without thoroughly thinking through the consequences. He
Chapter 05 – Ethics, Corporate Responsibility, and Sustainability
Dossier: The specific artifacts included in the DVD are:
1. Document outlining the “restructuring” of the New Accounts Department, should
they not reach their financial goals for the 4th Quarter.
IV. Discussion Questions:
The References and related Discussion Questions may be found in PowerPoint slides 2-1 to 2-11.
Learning Objective #1: To analyze the causes of ethical dilemmas
1. What is the source of this conflict and what role has the organization played to contribute to this
dilemma? (PPT 2-2)
The account representative is very motivated to make this deal go through because the
1. Why is Jason skeptical?
a. Client isn’t reliable
2. Which of the “Concepts in Ethical Behavior” are relevant to this scenario? Why? (PPT 2-2 & 2-3)
Most would be considered in this scenario, students’ answers will vary. Certainly Profes-
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3. Organizations can effectively help their employees to behave and act ethically by creating and com-
municating a code of ethics. What factors in this scenario should be considered if you were to devel-
op the code of ethics for Smith/Blackwell? See “Sources for Codes of Ethics” PPT 2-4 & 2-5.
Students should address each of the three aspects affecting the organization’s code of eth-
1. Describe Gina’s initial approach with Jason. What influence tactic does she use initially? Was it
successful? (PPT 2-6).
Initially, Gina relies on the common goals she and Jason share with regard to making
2. Jason’s behavior demonstrates:
a. caution
2. How does Gina handle Jason’s hesitation to move forward on the deal? How does her reaction
affect Jason? (PPT 2-6)
3. Gina’s over-excited. Jason should:
a. Calm Gina
3. Upon realizing the Jason will not easily sign-off on the deal, Gina attempts a variety of different
influence techniques. Describe them and evaluate how effective and appropriate they were given
the situation. (PPT 2-7)
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Gina tries to threaten Jason by saying she will go over his head and make the deal happen
4. How should Jason respond to a threat?
a. Ignore it
Learning Objective #3: To apply principles of ethical decision making
1. Consider each of the principles to guide ethical conduct (PPT 2-9). Analyze this situation from
both Gina’s and Jason’s perspectives using these principles. Which model did Gina rely on most
heavily? Jason? (PPT 2-8)
5. What are the risk factors?
a. Losing deal
2. Review the “Approaches to Social Responsibility” (PPT 2-11). Which approach is most closely
aligned with Gina’s behavior? Which approach most closely matches Jason’s? Explain your
choices. (PPT 2-10)
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Gina’s behavior seems to resemble the Obstructionist approach because she is not con-
6. What should Jason do next?
a. Let Gina make deal
• Assessing Your Ethical Decision-Making Skills
SELF-ASSESSMENT